Like all Canadian property markets, Calgary's real estate has recently experienced significant changes as a result of the pandemic, the economy, and supply chain concerns. Even though housing prices reached their pinnacle last year, rising interest rates make it very expensive to purchase a home. Calgary is an attractive area to reside due to its liveability, relative affordability compared to other regions of Canada, and diverse economy. Here are a few things to think about over the next ten years if you're interested in entering the Calgary home market.
Inflation is a concern that will be on everyone's mind in 2023. It is becoming more and more difficult to pay for even the necessities, let alone saving any extra money for a down payment on a home. Also, the cost of housing has increased due to skyrocketing loan rates. In turn, this is having a huge negative impact on the amount of money that individuals can save and borrow to finance their houses, which has slowed price increases and made it much more difficult for first-time homeowners to qualify for a mortgage.
The continued high interest rates are making it more difficult for borrowers to pass the federal government's mortgage stress test, despite the fact that house prices have moderated considerably since their peak last year. Borrowers must demonstrate their ability to pay the greater of: a) two percent over the contract rate; or b) the government benchmark of 5.25 percent in order to pass the stress test. As a result, Calgary's housing market might alter, with some residents opting for group ownership or smaller homes.
When it comes down to it, how many properties are available on the market at any given time and how many people are interested in them determine the prices of homes in Calgary and whether they increase or decrease. The recent price increase can be linked to two factors: the prolonged period of subpar housing stocks and the strong demand during the pandemic.
Calgary has the advantage of being able to create more housing more easily than some other Canadian cities since new construction is not constrained by physical or governmental restrictions. In order to meet the enormous demand, new homes will be developed, although it will take some time.
Rising prices have had an impact on real estate much as inflation has on Calgary citizens attempting to afford food and gas. Due to supply chain problems during the pandemic as well as high shipping and material prices, homes are being built for far more money than they formerly were.
Moreover, energy efficiency and ecologically friendly building materials have become more important to purchasers. Although sustainable homes are something to aim towards, they are not without cost. Homebuyers must either raise more cash to purchase a property of the same size or use the same sum to purchase a smaller home.
Since many years ago, Calgary has worked to draw entrepreneurs to the city, and their efforts are starting to bear fruit. On CBRE's yearly ranking of tech talent, they gained six points to move up to position 28, showing that they are controlling tech businesses and workers. As a result, tech businesses in Calgary received a record-breaking $322.2 million in funding.
In the upcoming years, technology will also have an impact on Calgary's real estate market. Homebuyers in all parts of Calgary now have more access to the city because to the growth of e-commerce and innovative ideas like e-scooters.Since residents are no longer forced to live near their workplaces and other frequented areas, Calgary will likely see a shift to previously less popular neighbourhoods due to being further removed from its central hubs.
Due to a change in the way that work is done, Calgary was already starting to see an issue with vacant downtown offices before the pandemic. That changed even further during the epidemic, and now many workers choose to keep a work-from-home position rather than look for employment in an office. Those who work from home are more willing to relocate to rural Alberta or the suburbs of Calgary.
On the other hand, working from home necessitates additional office space, which may lead to a rise in the demand for larger homes in established neighbourhoods.While some people are moving to rural areas to take advantage of remote work, the majority choose to stay in urban areas like Calgary to maintain a feeling of community or look to neighbouring cities like Airdrie, Cochrane, and Okotoks for less expensive real estate.
Residents of Calgary can continue to adjust to changes in how they work and travel the city as the real estate market develops over the next ten years. By adjusting to changes in the city's housing market, building new types of housing can assist satisfy the requirements of a varied population and maintain affordability.
